Nasir and Matt talk about the recent Yahoo sexual harassment claim involving two women and answer, "Why is it that manufacturers refrain from mentioning one another in their advertisements (eg. "Tide cleans better than these other brands – bunch of white bottles with no labels")? This is observed with, well, basically every niche of the commercial market, with two exceptions I've regularly noticed, Pepsi vs. Coke and cars."

Transcript:

NASIR: Welcome to Legally Sound Smart Business.
This is Nasir Pasha.
MATT: And this is Matt Staub.
NASIR: And this is our business legal podcast where we cover business in the news and also answer some of your business legal questions that you, the listener, can send in to ask@legallysoundsmartbusiness.com and also follow our Twitter account where you can also ask questions @askbizlaw. I want to say “askbizlaw.com” but it’s just “askbizlaw.”
MATT: I don’t think we have that one.
NASIR: Twitter.
MATT: Yeah.
NASIR: We probably have the dot-pizza one.
MATT: Are you asking people to send their questions via Twitter?
NASIR: Yeah, that’d be cool.
MATT: That’s tough – limited number of characters.
NASIR: That’s true. I didn’t even think about that but we’re also accepting questions on Reddit. That was cool. We do that every week. We do an AMA. I have lots of options for you. If you have a short question, Twitter is good for it.
MATT: They’ll have to find out who we are on Reddit, I guess. It should be pretty obvious.
NASIR: Search “Legally Sound Smart Business” and then we should come up.
MATT: All right. Well, we have a pretty interesting story for today because it deals with a lot of different things going on.
It’s a Yahoo executive. She and Yahoo in general are being sued by a former principal software engineer for sexual harassment and wrongful termination. Now, we’ve talked about similar things in the past but it’s typically been a male superior and the lawsuit’s been brought by a female – I don’t want to say…
NASIR: Inferior. Uh, subordinate.
MATT: A female employee.
Now, we have a female executive or superior and also a female employee. That’s a little bit different. Also, typically, with these there’d be some sort of reaction from the company. Yahoo is just straight up denying any of this happening and is very strong in their stance.
NASIR: Yeah, that seems unusual.
MATT: Yeah, I won’t get into the specifics of this unless you want to, but we’ll link the article so they can read because there’s a lot of accusations made. This also is taking place in another country, too, I believe, right?
NASIR: I don’t think so. I thought it was still in California. I know the suit’s in California so I assumed it’s in California but maybe not. We’ll take a look. But, you know, what’s interesting about this is, well, first of all, again, Silicon Valley is another scandal when it comes to the workplace environment. We covered Tinder. There’s this other case with a Google executive who overdosed on heroine on his yacht and some kind of killing as well. Silicon Valley is just being hit with a lot of issues right now. But I think what people may find significant – and this isn’t the first time that it’s happened – it’s when you have a female supervisor that’s being accused of this. I think people need to understand that these issues, when it comes to sexual harassment and wrongful termination, they stem from having power over another. That’s the main issue and that’s the main concept of employment law protections because, when you have an employee, they’re in your control as opposed to an independent contractor where the control is a little bit more loose. But, when you have an employee, because of that control, you have certain obligations that you may not have as a non-employer and I think, even though people generally understand this, they may not understand the significance and how much they could become liable, especially in California, for things like these.
MATT: Yeah, the important thing here is pretty much every example we’ve ever talked to or any example you’ve ever heard of deals with a male superior but the thing to keep in mind with this is just because it’s a female superior doesn’t mean that she can’t get in trouble as well. It does work both ways. You just don’t hear about it as much. I’m guessing it happens less frequently as well.
NASIR: And I’m sure, even when it does happen in those circumstances, it’s just as or if not more difficult for those employees to bring up the cause of action and I’m sure there’s double standards all across the board. That’s the world we live in and I’m sure that plays out in the courtroom as well, you know, when it comes to a jury and so forth. But the point is that the law applies the same in either case.
MATT: Right, and the point you made about power is very important to think about and something that all executives should keep in mind because they might let it get to their head. But the other thing I wanted to talk about which I mentioned at the beginning was Yahoo’s response. I think, when something like this happens, a company can do one of two things. They can either take some sort of action – whether it be suspension – I mean, worst case scenario, the termination of the person who’s being accused. Or they can do what Yahoo did and just outwardly deny it – just full denial, saying it’s all bogus.
You don’t see this too often with companies. Yahoo is a big company and this is a serious allegation. You don’t see big companies like this taking this sort of stance very often.
NASIR: Yeah, I had to get into some of the details here. It’s pretty detailed in the article that we’ll link. But there are issues regarding these two employees. They moved to California. They moved into an apartment together – separate rooms and so forth. They weren’t a couple or anything like that. But then, they did have some relations at home and then that may have been brought into the workplace. But the real problem is that this person being accused was a supervisor and was her supervisor. When she complained and was terminated, that creates a huge number of problems. Again, this fact pattern – whether it’s a female or female or not – is the exact same fact pattern that you see over and over again across other sexual harassment lawsuits and wrongful termination.
MATT: Yeah, because there’s these things you just shouldn’t do. I would say living with a…
NASIR: Subordinate?
MATT: Not a good idea. We talked about the Tinder issue and some other ones in the past. You can get by with dating someone that you work with but it’s more times than not not going to work out.
NASIR: All right. Well, I think we covered that issue to death. Or we should just do a sexual harassment lawsuit every week which will be very easy to find.
MATT: Yeah.
[MUSIC]
MATT: All right. Well, let’s go to the question of the day.
“Why is it that manufacturers refrain from mentioning one another in their advertisements? Example, ‘Tide cleans better than these other brands.’ A bunch of white bottles with no labels. This is observed with, well, basically every niche of the commercial market with two exceptions I’ve regularly noticed – Pepsi versus Coke and the car industry. So, why do most of these commercials not mention their direct competition?”
NASIR: I don’t know if the premise is right because I think there’s plenty of people that do comparisons but I think the main purpose of doing all that is to not mention your competition because you give them more brand recognition. But, with Pepsi versus Coke, Coke knows everyone knows Pepsi and Pepsi knows everyone knows Coke, but being able to differentiate and attack your competition is a little bit better. A good famous one is AT&T and Verizon – they’re always going at each other. Even the legal restrictions aren’t too bad because, for example, you could even use the competitor’s logo in your commercial just as Verizon and AT&T and Pepsi and Coke have to each other because it’s part of the fair use. There’s no confusion of who this commercial is for. Any kind of association or endorsement. In fact, you can just make fun of them and it’s part of the fair use law. So, generally, they’re legally free from doing it – with, you know, certain exceptions and so long as they’re not misrepresenting what the other company does then they should be fine.
MATT: I think my answer to this, from the legal perspective, is the commercials that don’t actually mention who the competition is, I think they’re worried about some sort of lawsuits. I think their legal team just didn’t fully inform them of what they’re allowed to do in the commercials. That’s my legal answer. My other answer is, if they mention their competition, the competition is just going to do another commercial mentioning them.
NASIR: That’s possible.
MATT: Maybe it’s going to be worse than the commercial that they did. That’s my legal answer and non-legal answer to this question.
NASIR: Also, I think, when I see a Tide commercial and they do what he mentioned – those general white bottles with no label and this is the competitor’s brand – at that moment, I have trouble thinking about what the competitor is. You know, what is the competitor of Tide? Do you know? I can’t think of one.
I think, just psychologically, certain brands have association when it comes to soft drinks. Everyone knows what the soft drinks are – Pepsi and Coke. Everyone knows which cars there are – you know, as far as car manufacturers. Maybe that’s me – because I don’t buy my own detergent. Maybe that’s the issue.
MATT: I really don’t watch commercials either.
NASIR: Yeah, that’s also an issue. You could be right. But, from a legal perspective, like we said, I don’t think there’s much restriction.
MATT: We have a lot of leeway with this.
NASIR: Yeah, even saying that you’re better, I think that’s fine.
MATT: Yeah.
NASIR: That’s just a matter of opinion.
MATT: Yeah.
NASIR: That Tide cleans better than these other brands, for example.
MATT: Yeah.
NASIR: All right, I think that’s very good. Appreciate your question for that.
Thank you for listening.
MATT: Yeah, and we will just bash some other podcasts while we’re here – well, not bash but we’ll mention them.
NASIR: Actually, one thing that is true is our podcast is better than our competition or our competitors’ podcasts.
MATT: That’s true. That’s very true. I’ll agree with you on that.
NASIR: Who our competitors are, I have no idea, and neither do you because that’s the point.
MATT: All right, before this gets too out of hand, I will say keep it sound and keep it smart.

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Legally Sound | Smart Business covers the top business stories with a legal twist. Hosted by attorneys Nasir N. Pasha and Matt Staub of Pasha Law, Legally Sound | Smart Business is a podcast geared towards small business owners.

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